Pritzker Choice Could Cause Rift

By

Peter Nicholas,

Melanie Trottman and

Elizabeth Williamson

Updated Feb. 7, 2013 9:32 p.m. ET

WASHINGTON—A nomination of Penny Pritzker as the next commerce secretary would threaten to divide President Barack Obama's political coalition, pitting women's advocates against labor leaders angry about the treatment of workers at her family's hotel chain.

Ms. Pritzker, a wealthy businesswoman and Democratic donor whose support helped propel Mr. Obama from the Illinois state legislature to the White House, is the front-runner for the cabinet post, according to two people familiar with the selection process.

Terry O'Neill, president of the National Organization for Women, applauded the president's nomination of a woman as interior secretary and the possible elevation of Ms. Pritzker. "That's great," Ms. O'Neill said.

ENLARGE

Hyatt Corp.'s Penny Pritzker
Associated Press

Some union officials, however, would be unhappy to see her become the nominee. One union, Unite Here, has targeted Ms. Pritzker and her family's Hyatt hotel chain, enlisting the Obama Labor Department in an 18-month investigation of alleged worker-safety violations. The federal probe ended with a finding of no major violations.

Last July, a group of labor leaders, including Obama ally and AFL-CIO President Richard Trumka, joined Unite Here at a news conference in Washington, where Unite Here called for a global boycott of Hyatt Hotels.

Several union officials said Thursday they had concerns about Ms. Pritzker's connections to Hyatt Corp., where she serves on the board. But they may not publicly oppose her nomination for tactical reasons, deciding instead that they would rather use their political clout in hopes of influencing the decision on who is appointed labor secretary.

Asked for comment, Unite Here spokeswoman Annemarie Strassel said the union didn't have one "at this time."

Other possible stumbling blocks include the failure in 2001 of Hinsdale, Ill.-based Superior Bank that Ms. Pritzker helped run and in which her family held a 50% stake. Unions also have complained about the Pritzker family's past use of trusts and accounts, some of them located in tax havens. Those arrangements could raise fresh questions given Mr. Obama's focus on targeting such strategies.

In the event the Pritzker nomination unravels, the White House has identified at least one backup candidate, according to a person familiar with the search: Fred Hochberg, chairman and president of the Export-Import Bank. The White House said Mr. Obama has made no decisions and an announcement may be weeks away. Ms. Pritzker declined to comment Thursday.

Commerce appointments often go to prominent businesspeople and presidential fundraisers. Ms. Pritzker is both. In 2008, she headed the Obama campaign's national-fundraising team that smashed records for presidential donations. She was less active in 2012, puzzling some members of the president's team. One person familiar with the matter said she focused instead on pressing family business dealings.

Unite Here, which represents about three-quarters of Hyatt's unionized workers in North America, battled the company for years over workplace conditions. In 2010 and 2011, complaints about alleged Hyatt worker-safety violations poured into the offices of the chief workplace regulator, the Occupational Safety and Health Administration. Most were prompted by Unite Here, which publicized its filings as part of a campaign it called "Hyatt Hurts."

The complaints that federal OSHA handled alleged housekeepers in six Hyatt hotels were exposed to hazards of slips, trips and falls and musculoskeletal injuries, among other possible violations. OSHA embarked on the 18-month investigation, one of the most comprehensive workplace safety probes of Mr. Obama's first term, sending inspectors with video cameras to shadow housekeepers on their rounds at hotels in Illinois and Texas.

During one Chicago inspection, a Spanish-language interpreter and an OSHA inspector tripped over each other and a housekeeper as she vacuumed a room. Another videotaped scene showed a Hyatt representative, the OSHA inspector, the interpreter and the housekeeper crowded into a linen closet to observe how towels were loaded onto a housekeeping cart.

In the end, federal OSHA inspectors found no ergonomic risk violations. But it did suggest tools, bedsheets and carts that could minimize stress on housekeepers. Hyatt responded by saying it had been "harassed for years by duplicative and pointless OSHA inspections."

OSHA says it has a legal obligation to respond to all complaints and that it initiated an inspection of Hyatt "as a result of formal complaints that alleged serious workplace hazards at Hyatt hotels in Texas and Illinois."

OSHA found lesser violations, including two vacuum cleaners whose three-pronged plugs each had a prong missing. One hotel failed to record temporary employees' injuries. Hyatt challenged those citations, and OSHA dropped them after Hyatt agreed to make some concessions.

In a written statement Thursday, Hyatt cited its "outstanding safety record" and history of strong relations with unions, and said it would continue to collaborate with federal regulators. It also said Unite Here, as part of its organizing campaign, "aggressively spread misinformation about Hyatt, including making multiple allegations to OSHA."

Unite Here President D. Taylor said, "The findings of occupational health experts, state regulators, and the testimony of housekeepers nationwide speak for themselves. Together, they paint a picture of debilitating workloads, high injury rates and persistent pain at Hyatt hotels."

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